WilliamSpain

Coca-Cola
KO, -1.48%
was off by $3.80 to $45.17 at the close after scraping as low as $44.11 early on.

On Thursday, the company reported profits of $1.6 billion, or 65 cents a share, up 16 percent and slightly ahead of the 63-cent average estimate of analysts polled by Thomson First Call. But revenue came in a bit below expectations, volume was soft and the company said that it faces "challenging" conditions in some key markets.

Marc Greenberg of Deutsche Bank downgraded the Atlanta-based company's shares from "buy" to "hold" and wrote in a note to investors that the company's "value strategy [is] out of balance."

Fewer shipping days in the second half "will unwind some of the [first half] profit benefit," Greenberg noted. "This is not a new fact, but the lack of volume momentum suggests the de-leveraging `hit` on the [earnings before interest and taxes] could be more negative than expected."

In addition, Coca-Cola is apt to up its marketing and other spending, which will also weigh on its results going forward, he said.

The "bar [is] coming down," he continued as the "incoming CEO comments suggest target growth rates may be headed lower. Sustainable, consistent profit growth beyond 7 percent may be challenging."

Marc Cohen of Goldman Sachs kept his rating at "outperform" but wrote Friday that the second quarter results were "below our estimate and of low quality."

The company is "taking remedial actions in some trouble markets, which we believe could dampen profit growth in [the second half]."

"This does not reflect a change in our belief that 9 percent to 10 percent [earnings] growth is attainable on an ongoing basis, but rather that new management could prolong the 'transition' the company has been making over the past few years and reinvest against growing the top-line."

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